What happened: ServiceNow (NOW) gained 3% in early trading on Thursday.
What’s behind the move: The Santa Clara, Calif.-based software company reported quarterly subscription revenue and bookings that topped analyst expectations, reinforcing investor optimism that its artificial intelligence offerings are helping drive growth.
Subscription revenue climbed roughly 25% year over year to $3.88 billion last quarter, while current remaining performance obligations (cRPO), a key metric of near-term bookings, rose 21% to $13.2 billion.
Management highlighted that demand for the company’s AI products continues to outperform expectations, highlighting ServiceNow’s broad customer demand, solid execution, and operating leverage.
What else you need to know: ServiceNow and other software firms have been aggressively promoting the integration of generative AI tools into their platforms as the industry has come under scrutiny earlier this year over concerns of AI disruption to their business models.
ServiceNow, which offers workflow management tools to enterprise customers, has seen its stock plummet 37% year to date.
Software stocks were mostly lower on Thursday. Shares of Adobe (ADBE) and Workday (WDAY) dropped, while Snowflake (SNOW) stock rose. The Tech-Software Sector ETF (IGV) declined more than 1%.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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